Reliance Industries Limited (RIL) has just changed the face of the telecom sector with the introduction of Reliance Jio. It is now set to make an entry in Indian e-commerce with its new online-to-offline commerce model, as announced in Reliance Industries’ 41st Annual General Meeting (AGM). Reliance is looking to take the advantage of its vast network of retails stores and a robust digital infrastructure to achieve this goal.
RIL is a multi-billion dollar conglomerate, established by Dhirubhai Ambani in 1977 with its headquarter in Mumbai. It now owns businesses across various sectors including telecom, petrochemicals, energy, retail, entertainment, etc.
Mukesh Ambani, RIL Chairman, said, “This platform will bring together 35 crore and growing customer footfalls at Reliance Retail stores, 21.5 crore and growing Jio connectivity customers, targeted 5 crore Jio giga homes and most importantly, all the 3 crore small merchants and shop-keepers all over India who provide the last-mile physical market connectivity,”
Reliance will be targeting small merchants and pharmacies in the early stages to establish their market. Along with its JioGigaFiber, optical fiber-based broadband service, the company will be extending its fiber connectivity to homes, merchants and SME’s covering 1100 cities.
“Our new commerce platform will redefine retail in India by enabling all customers ─ rich or poor, whether at home or on mobile ─ to transition from simple shopping to personalized immersive shopping experience. This will be made possible by Augmented Reality, holographic technology, and VR devices,” said Ambani.
This new online-offline hybrid model will help create a shared profitability for the small merchants by allowing them to reach a wider customer base. It will help solve the last mile coverage problem by integrating those small retailers across the country. Also empowering these small businesses with JioGigaFiber will help them compete with larger businesses.
It will not only benefit the smaller merchants but it will also enable the larger business to grow in size and be more competitive on the global market.
With respect to customers, it will mean more options and cheaper products. Reliance is also trying to incorporate augmented reality and holographic technology to provide a more rich and immersive experience for its customers. Providing a completely personalized shopping experience to the customers will not only make the shopping experience immersive it will remove the hassle of going through unnecessary products and making product selection much simpler and quicker.
Reliance retail has over 7,500 stores in over 4,400 cities across the country with a footfall of over 350 million customers noted last year. Its revenue crossed over 69,000 crores last year with a 100% year on year growth.
It is clear that Reliance has done its groundwork before marking its entry in the Indian e-commerce market which has already reported a revenue of over 1,70,000 crores ($25 billion) last year and is expected to grow at 20% a year to reach 3,50,000 crores ($52 billion) by 2022.
Speaking of the e-commerce market, Flipkart and Amazon already occupy a market share of about 31.9% and 31.1% respectively and are aggressively trying to gain more customers. Flipkart is flush with money after a recent acquisition by Walmart. Then there is also Paytm which is increasing its share rapidly with its Paytm Mall. It will be vital for Reliance to use its already existing customer base to navigate this space to achieve its goals.